The Public Utility Law Project of New York works to advance universal service, affordability, and customer protection for low and fixed income energy and utility consumers.
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Friday, December 19, 2008

Broadband Lifeline for Low Income Households: Why Is the New York PSC Silent?

There is an on-going proceeding at the FCC regarding the future of the federal Universal Service Fund (“USF”) and intercarrier compensation for connecting calls from other companies , two concepts long-overdue for an overhaul. Types of local service providers that did not exist or were insignificant when the laws and rules were written, such as wireless carriers and Voice over Internet Protocol (“VoIP”) providers like cable companies offering voice service, are forced to fit into existing schemes, like the proverbial round peg into the square hole.

Likewise, the concept of services to be included in universal service funding mechanisms has changed. As stated by the FCC in its November 5, 2008 order seeking public comment

The communications landscape has undergone many fundamental changes that were scarcely anticipated when the 1996 Act was adopted. The Internet was only briefly mentioned in the 1996 Act, but now has come into widespread use, with broadband Internet access service increasingly viewed as a necessity.

The massive proposal, nearly 500 pages long, included three different versions as to how the USF and intercarrier compensation regimes should be fixed. In somewhat of a surprise, Chairman Kevin Martin, who is expected to step down around Inauguration Day next month, proposed a Lifeline discount program to help low income and rural customers afford broadband and all of the opportunities it offers, in his separate statement.

I view our failure to implement the Joint Board’s recommendations as a tremendous missed opportunity. In particular, I supported the Joint Board’s determination that broadband should be included in the universal service program. As I have said before, to fully appreciate and take advantage of the Internet today, consumers need broadband connections. Without this underlying infrastructure, efforts to implement advances in how we communicate, work, and provide education cannot succeed. **** In addition, I would have created a broadband Lifeline and Link Up program to ensure that low income consumers are not left out of our broadband future.

Specifically, Martin would have made available $300 million each year for the next three years to enable eligible telecommunications carriers (“ETCs”) to support broadband Internet access service and the necessary access devices. In particular, if an ETC provides Lifeline service to an eligible customer, the Pilot Program would support 50 percent of the cost of broadband Internet access installation, including a broadband Internet access device, up to a total amount of $100. In addition, if an ETC provides Lifeline service to an eligible household, the Pilot Program would double, up to an additional $10, the household’s current monthly subsidy to offset the cost of broadband Internet access service.

PULP joined in the filing made by the National Association of State Utility Consumer Advocates (“NASUCA”). While NASUCA’s comments expressed concerns with Chairman Martin’s proposal, ranging from deployment timetables and consumer protections, we certainly support bringing a Lifeline broadband discount to those who need it, although the details need to be further developed.

However, in its comments to the FCC in this proceeding, the New York State Public Service Commission was silent as to the merits of Lifeline for broadband. The PSC's comments touched on a range of issues, but did not even mention broadband. Apparently the PSC had no opinion on the subject it wished to share with the FCC, not to mention New Yorkers who cannot afford monthly charges for broadband service.

This omission is unfortunate, but not surprising. As a yardstick measurement of the pool of eligible Lifeline subscribers statewide, nearly one million households in New York State receive Food Stamps. Yet New York has a greatly diminishing number of telephone customers receiving a Lifeline discount, from over 750,000 Lifeline customers statewide in 1996 to a little over 300,000 today. Further, while broadband has been deployed in virtually all urban and suburban areas of the state as well as in the territories of the independent telephone companies, there has been a significant delay in rolling out broadband in rural parts of Verizon’s territory. In addition, while the cable companies have been unveiling their broadband service on a wider basis, the problem of affording broadband service (regardless of where the customer lives or who the provider is) is a real and growing problem. Has the PSC done all it can to improve Lifeline telephone enrollment to reduce the economic burden of telecom services or to promote broadband availability across the state? Hardly.

Nationally and in New York, deployment and pricing of broadband has been largely left to "the market" with the result that the United States and New York are not world class leaders with respect to physical broadband access, internet speed, price, and penetration. According to the OECD, the United States ranked 15th in 2007 on the number of persons per 100 with broadband service.

Former New York Governor Spitzer announced a Universal Broadband Initiative in December 2007 to bring broadband to the masses throughout the state. Since then, much discussion has taken place at meetings of the New York State Council for Universal Broadband, small grants have been awarded, but not enough attention has been given to the fact that many people with low and fixed incomes simply cannot afford broadband service. Very little action has taken place, period.

For New York to be a real leader on broadband, it must not only create a statewide organization to “look into it,” it must take action. One place to take action would be to arrest the declining subscribership of low income households to phone service and the corresponding decline in telephone Lifeline assistance. It makes little sense to talk of broadband access and broadband affordability if growing numbers of the poor cannot afford voice service.

Another place to act would have been in the Public Service Commission’s comments to the FCC, pushing for a robust broadband Lifeline program and offering suggestions as to how to improve Chairman Martin’s proposal. Its silence in this case, especially when combined with the lack of real developments on broadband and other state universal service initiatives, can certainly be interpreted as a lack of interest.

There you have it, the New York PSC’s record on broadband -- a lack of initiative and a lack of leadership. Time for a change.